De Tocqueville meets eBay: Giving, volunteering, and doing good in the new social sector

NEW DIRECTIONS FOR PHILANTHROPIC FUNDRAISING, NO. 45, FALL 2004 © WILEY PERIODICALS, INC.

85

The electronic marketplace unleashes whole newways for people and organizations to work togetherin the social sector and profoundly challenges thedominance and the operating styles of organizedphilanthropy.

8De Tocqueville meets eBay: Giving, volunteering, and doing good in the new social sector

Marcia Sharp

ALEXIS DE TOCQUEVILLE published his famous observations about thepowerful and positive role of associations in American life in 1840.For the better part of two centuries, his words and his name have con-veyed the fundamental tendency of Americans to come together forboth mutual and public benefit. This chapter explores changes thattoday’s electronic marketplace is bringing to the organized civic andsocial action that de Tocqueville found so distinctive and suggestswhat these changes may mean for foundations, large and small.

Key developments in the external environment for foundation workFour major marketplace trends are impinging on foundations.Taken together, they are creating some interesting new possibili-ties and some challenges as well.

86 IMPROVING AND STRENGTHENING GRANT MAKING

New donors in the marketplace

New and different donors are pouring into the system. New foun-dation creation is at record levels: nearly half of all foundations(about thirty thousand) have been formed since 1990. High-visibility giving by the very rich has also surged: a recent issue ofBusiness Week (“The 50 Most Generous Philanthropists,” 2003)tracked the pledges and gifts over the past five years of fifty topindividual philanthropists. These gifts and pledges added up to anastonishing $47 billion, about 50 percent more than all foundationgiving in 2002. Women and members of racial and ethnic commu-nities are increasingly recognized and reached to as significant con-tributors. Researchers, diplomats, and others are just beginning topay real attention to diaspora giving: immigrants to the UnitedStates who send money back home. Fewer than 2 million FilipinoAmericans, for example, are sending about $5 billion back to thePhilippines every year (Greene, 2002). Donor-advised funds incommunity foundations, other nonprofits, and commercial enter-prises are growing rapidly; one study has estimated sixfold growthin these funds since 1998 (Foord, 2003). The existence of these newdonors has spawned a veritable industry of donor advisers and ser-vice providers. It is driving the formation of new forms of philan-thropic infrastructure and has given rise to at least one majornational initiative, New Ventures in Philanthropy, at the Forum ofRegional Associations of Grantmakers.

Changing expectations

What people expect from institutions is changing dramatically.Most of the organizations that people deal with every day are doingbusiness in ways unimaginable ten years ago. Retail providers allowus to order on-line and to track the progress of our order any timewe wish. Banks let us see our balances, move money betweenaccounts, and make loan transactions twenty-four hours a day on-line. Automobile manufacturers provide material that allows us tocompare the performance metrics of the cars we are considering.Some school systems have installed video systems to let parents see

87DE TOCQUEVILLE MEETS EBAY

inside the classroom anytime. In this context, foundations, withtheir closed doors and quarterly dockets, seem increasingly outof step.

Businesses as partners in social action

Business is becoming an accepted part of the social benefit deliv-ery system. There is no real continuing need to discuss whether thefirewall between commercial and nonprofit enterprises is beingbreached. In fact, profit-making companies are involved at virtu-ally every step of America’s giving process. Fidelity’s Charitable GiftFund, a pioneer twelve years ago, is now America’s largest publiccharity. Major foundations turn to profit-making consulting firmsfor due diligence with prospective grantees. American Expressurges cardholders to make charitable donations and gives extrareward points if they do.

Jed Emerson, a former social worker and now lecturer at theStanford Graduate School of Business, says that we should havebusiness measures of success beyond financial performance. Emer-son’s work (2004) on the blended value proposition shows the con-nections between five related public benefit fields with differentroots in charitable or profit-making work: corporate social respon-sibility, social entrepreneurship, social investing, philanthropy, andsustainable development. In this climate, it is not surprising thatone large new foundation player, Skoll, defines its work as being inthe social sector, rather than the nonprofit, or that eBay and Omid-yar Foundation founder Pierre Omidyar recently announced hewas reconfiguring his foundation to become the Omidyar Network,in part to permit direct investment in profit-making enterpriseswith the capacity to deliver social return.

The Internet

The Internet makes it easy to reach, organize, and equip individu-als. Organizations used to reach and mobilize volunteers andactivists through their member newsletter or the organizational“toolkit” for taking action. Today, they can put knowledge in


people’s hands, connect them with like-minded activists across townor around the world, and give them either ideas or marching ordersfor how to take action—all electronically and whether or not they“belong” to an organization. People can be aggregated to very largenumbers very quickly and in ways that bypass many of the fixedcosts of older-style nonprofit mobilization (from the salaries of peo-ple-intensive hierarchical organizations, to printing and postage).They can be plugged into existing organizations locally (see, forexample, connectforkids.org) or assembled as a virtual strike forceat the ready (savecascobay.org was created almost overnight in May2004 to stop a liquefied natural gas terminal from being establishedon an unspoiled Maine island).

The emergence of a new breed of playerHow are these changes—the entry of new donors into the mar-ketplace; the expectations for open, fast-acting, and customer-responsive institutions; the presence of business as a credible andeffective partner in social action; and the capacity of the Inter-net for direct and instantaneous reach to and aggregation of largenumbers of individuals—playing out across the sector?

As one response, consider the emergence of GlobalGiving, anorganization often described as “the eBay for development.” GlobalGiving is an open, Web-based platform for individuals,companies, and other groups or organizations that want to find andfund grassroots projects in social and economic development.

It is the brainchild of two former World Bank employees whocame to believe that too many of the problems tackled by the bankwere not amenable to the ponderous, structured solutions it pur-sued. They experimented, inside the bank, with what was consid-ered a radical and wildly successful innovation marketplace thatcompletely cut loose from prior procedures the bank had in placeto develop, vet, and allocate funding support to new ideas. Theenergetic and worldwide response they got caused them to leavethe bank to create something new.


The result, still a work in progress, is GlobalGiving. It presentsas a Web site for small and individual donors who want to selectprojects from a menu of more than 250 vetted projects in ninetheme areas around the world—preserving the Oaxaca watershedin Mexico, for example ($30,800 needed for the project featured),or using theater for social change in India ($18,421 needed).

In reality, though, it is a multifaceted platform for a great rangeof individual, organizational, and corporate players who cometogether to support promising projects by social entrepreneurs inevery corner of the globe. It is organized as a for-profit company,with an aligned but independent GlobalGiving Foundation thatreceives and disburses donations to projects. Hewlett Packard andVisa are worldwide corporate partners. GlobalGiving supports cus-tomized employee-giving programs for corporations. It providesfeature roles for a cluster of worldwide nongovernmental organi-zations (Ashoka, for example) that select and vet the projectsoffered on the site and get exposure for their own work as well.There is a “Donation Wizard” feature for donors who are not surewhat they want to do. A Haitian portal is now in the works, fordiaspora funding for that country.

Currently, GlobalGiving is aggregating the giving of thousandsof donors. Dennis Whittle, CEO and cofounder, has his eye onmillions of donors, with the aspiration to create what he calls “theworld’s richest marketplace for international aid and philanthropy.”By “richest,” he means not just money, but also ideas, expertise,capacity, and impact.

And from the volunteering side of the sector is Meetup.com, afor-profit venture that provides a free electronic service and struc-ture for people who want to organize face-to-face meetings aboutanything, anywhere. It came to prominence in the Howard Deancampaign, but its mission, much broader and enormously ambitious,is to revitalize community in America. It traces its genesis to a fewseminal books, including Robert Putnam’s Bowling Alone (2000).Pierre Omidyar has been a significant supporter and investor.

Meetup is the electronic backbone for 1.2 million people whoare meeting face-to-face in small groups, mostly in cafés and


coffee shops, on four thousand different topics, in the United Statesand about fifty other countries. Some of these topics seem right athome in what we think of as the nonprofit and social action sector:voter registration, human rights, women’s rights, progressive Mus-lim concerns, and political campaigns. Others are perhaps less so:witchcraft, knitting, poker, and NASCAR racing.

Implications for the social sectorGlobalGiving and Meetup are only two examples of an emergingexplosion of electronic infrastructure to support giving, volunteer-ing, connecting, and influencing in today’s social sector. As sites,they may or may not survive and thrive. But they almost assuredlyprovide a window on the future.

They point toward a time when there will be a marketplace ofphilanthropic funding for social causes in which major foundationswill be much less dominant, and where their giving heft is takenup, or perhaps even dwarfed, by more agile, small foundations andindividuals, who will be able to come together, share the researchthey used to do individually, make decisions faster, and aggregatetheir giving to achieve larger impact.

They suggest a time when philanthropy overall will be seen as amuch more integrated system than it is today, drawing on the dif-ferent strengths and impulses of old and new, large and small, andindividual and institutional donors.

They suggest the possibility that this expanded philanthropy willitself be integrated into larger platforms that support the work ofa variety of social change partners, including businesses seekingsocial benefit, and government.

They open up the possibility of equipping millions of individualsto be participants in the arena of social action, but also suggest thatthe distinctions between charitable volunteering, social activism,personal growth, and use of leisure time will become even moreblurred. They also suggest the possibility that spontaneous short-term efforts for the cause du jour, mobilized through the Internet,


will become more prevalent in our sector—but that the capacityrepresented by stable 501(c)(3)s could either go unused or atrophy.

Action steps for foundationsHere is a list of some of the things foundations might do if theythought these trends and examples were worthy of attention:

• Act faster, more openly, and responsively. Say no (and yes) morequickly. Move away from the quarterly docket. Set up an electronicsystem to show where proposals are in the process. Set up a processto make a grant decision overnight if the circumstances are right.

• Invest in efforts to develop new giving. New donors may be pour-ing into the system now, but many more would join the ranks ifthey were asked, cultivated, and supported. So far, not enoughfoundations have stepped forward to build the new giving anddonor support infrastructure needed, particularly at the commu-nity and regional levels.

• Build the systems to cluster giving, especially among small founda-tions, to achieve greater efficiency and impact. Take a cue from Global-Giving: find ways to come together to reduce the huge barriers thatsmall foundations and individuals face in learning about an issuearea, identifying and qualifying potential grant recipients, dispens-ing enough money to make a difference, and staying in some rela-tionship with the grantees.

• Find more ways for old and new donors to work together. It is allphilanthropy perhaps, but so far there are very few projects on theground that bring new and old donors together. Each has much tolearn from the other.

• Accept the role of business and social entrepreneurship in social change.Seek rather than shun the business partners whose skills, strengths,and needs can provide the right complement to your work.

• Challenge the paradigm that controlling, labor-intensive hands-on,and “all by ourselves” is the same as “excellent.” There is much to belearned about due diligence and control from GlobalGiving, which


asks able and proven nonprofits in the business of social and eco-nomic development to make recommendations, and then asksdonors to accept that qualification, combine with others, and movequickly.

• Stay the course in supporting the development of the big platformsthat support giving and volunteering. There is significant promise inthe big emerging entities—GlobalGiving and Meetup, describedhere, or others like Volunteer Match, Guidestar, and MoveOn—that have the potential to link, connect, mobilize, aggregate, andinform people and organizations in ways that benefit the whole sec-tor. A cluster of major U.S. foundations is carrying the philan-thropic investment in development of these platforms (Hewlett,Skoll, Mott, Kellogg, Ford, and Carnegie, among others). Thereis room for more partners.

• Be a navigator-leader. Allocate some foundation resources toexplore and map what is going on in the new social sector, sincethere is much we do not yet understand. Then share what you learn.For example, what are the demographics of the users of the newentities and systems described in this chapter? To whom are weopening doors? Who is still not being reached or enabled? Whatelectronically generated redundancies in the sector does it makesense to get rid of? Which must we keep and protect, and why?

Conclusion“As soon as several of the inhabitants of the United States,” deTocqueville wrote, “have taken up an opinion or a feeling whichthey wish to promote in the world, they look out for mutual assis-tance; and as soon as they have found each other out, they com-bine” (de Tocqueville, 1873, p. 133) The tendency to combinethat de Tocqueville found so striking stays with us as a nation.There are extraordinary new possibilities for how we enable, andthen fund and deploy, the combinations of talent and resourcesthat contribute to public benefit. Foundations, in combinations


among themselves and with other partners, may find a futuremore exciting than they imagined—and more relevant than theirdetractors have predicted.

Referencesde Tocqueville, A. Democracy in America. Boston: John Allyn, 1873. Emerson, J. “The Blended Value Map: Tracking the Intersects and Opportu-

nities of Economic, Social and Environmental Value Creation.”[www.blendedvalue.org/Papers/default.aspx] 2004.

“The 50 Most Generous Philanthropists.” Business Week, Dec. 1, 2003, p. 81.Foord, E. “Philanthropy 101: Donor-Advised Funds.” Journal of Financial

Planning, Nov. 2003, p. 1.Greene, S. G. “Giving Back to Their Homelands.” Chronicle of Philanthropy,

May 16, 2002. [http://philanthropy.com/free/articles/v14/i15/15000601.htm].

Putnam. R. Bowling Alone: The Collapse and Revival of American Community.New York: Simon & Schuster, 2000.

marcia sharp is the principal of Millennium Communications Group inAndover, Massachusetts.

De Tocqueville meets eBay: Giving, volunteering, and doing good in the new social sector

Documents

Transcript of De Tocqueville meets eBay: Giving, volunteering, and doing good in the new social sector